‘Disinvestment not for shutting down public firms,’ says FM Sitharaman

New Delhi: Finance Minister Nirmala Sitharaman on Friday said the principle of the government's disinvestment programme is not to shut down any unit or company but to make them more efficient and professionally driven. Highlighting that public sector enterprises which were privatised between 1994 and 2004 are being driven by professionally run boards, the minister said these companies have only improved.

Addressing the iconic week celebrations of the Department of Investment and Public Asset Management (DIPAM) as part of 'Azadi ka Amrit Mahotsav' here, Sitharaman said privatisation of CPSEs is intended at ensuring that these companies are run efficiently and cost-effectively. (ALSO READ: Fitch improves India's rating outlook to stable on 'solid' medium-term growth prospects)

“The principle with which disinvestment is happening now is not to shut down a unit. The economy needs that many number of such companies and many, many more as well. So if we want to have that activity done professionally and open up spaces for people to come and do it, our interest is not to shut down, we want to prime it up, we want to have them to run far more efficiently so that contributions can be made to the economy,” Sitharaman said in her webcast speech from Bengaluru. (ALSO READ: India among top 10 global economies for FDI in 2021 despite dip in investment to $45 billion: UN)

She said the principle of disinvestment is to make sure that companies which are being privatised are in the hands of people who can run it, bring in more capital and give same production.

“So it's not to close down but to bring in opportunity for better and more investments to be made,” Sitharaman said.

The government has also lined up over half a dozen companies for strategic sale. These include Shipping Corp, CONCOR, Vizag Steel, IDBI Bank, Nagarnar Steel Plant of NMDC and HLL Lifecare.

So far in the current fiscal year, the government has mopped up over Rs 24,000 crore from CPSE disinvestment. The target for full fiscal year has been set at Rs 65,000 crore.

In last fiscal year, over Rs 13,500 crore was realised via CPSE disinvestment, which also include amount realised via privatisation of Air India.

The minister further said CPSE Bharat Bond ETF constitutes about 84 per cent of all Exchange Traded Funds in the market. The AUM (asset under management) under Bharat Bond ETF stands at over Rs 53,000 crore.